Cutoff yield in 6-month T-bills rises to 11.5%

KARACHI: The cutoff yield in the auction of the benchmark six-month market treasury bills (MTBs) sharply increased to 11.5 per cent, much higher than the key policy rate of 8.75 per cent.

A day ago, the State Bank of Pakistan (SBP) conducted an auction of the government treasury bills maturities for the sale of T-bills of three-, six- and 12-month.

The realised value at the auction was Rs485 billion with the face value of Rs504 billion against the offered value at Rs715 billion and Rs749.33 billion, respectively.

The central bank accepted the bids for three-month treasury bills at realised value of Rs330 billion and face value of Rs338 billion against the cutoff yield at 10.7890 per cent.

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The bids for the benchmark six-month bills were accepted at the realised value of Rs105.178 billion and the face value of Rs110.98 billion at the cutoff yield of 11.50 per cent.

Likewise, the SBP accepted the bids for 12-month T-bills at the realised value of Rs49.4 billion and the face value of Rs55 billion at the cutoff yield of 11.5143 per cent.

The central bank on November 19, 2021 announced a sharp increase in the key policy rate by 150 basis points to 8.75 per cent. The cutoff yield in the latest auction indicates the policy rate may further increase in the next policy meeting.

The Monetary Policy Committee is scheduled to meet on December 14, 2021.